INTERVIEW: Accessible finance is key to realizing Uganda’s potential

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Dmitry PoshidaevaMany UN agencies have a very specific thematic focus: they deal with women, children, health care or other important issues. However, the UNCDF can deal with different thematic areas, provided there is a financial solution that can be used to address a specific challenge, from education to agriculture.

Uganda promises a lot. For example, 50 percent of all arable land in East Africa is in Uganda; 75 percent of the Ugandan population consists of young people under the age of 30.

This thus potentially creates the conditions for Uganda to move towards achieving the Sustainable Development Goals and its own development goals.

But to unlock that potential, you have to invest in building systems that allow the country to use that potential, including in finding and applying various financial solutions and ensuring that there is sufficient funding for those development plans.

UN news Are small businesses in Uganda finding it difficult to access finance?

Dmitry Pozhidaevi Yes. We know there is a lot of unaddressed demand. The real problem is that in the private sector context we are talking about very inexperienced and very rudimentary business processes and corporate structures. They do not instill sufficient confidence in the potential financiers – such as banks and wealth providers – that those entities can use the funds in the best possible way and repay their debts.

UN news How can you tackle this problem in the north of the country?

Dmitry Pozhidaevi In the north of Uganda we are active in several areas. One is to support local governments and the public sector, especially at the district level, in finding financial solutions for various public projects. These public projects can be in the field of climate adaptation, local economic development or in the field of forced displacement.

Agriculture employs about 75 percent of all Ugandans, so it is important that we take agriculture to the next level in terms of productivity and competitiveness.

We are also involved with the private sector in digital finance and the digital economy, integrating smallholder farmers, and affiliated savings and credit associations of villages into the formal banking system, improving their access to finance.

UN news/ Conor Lennon

Okubani Market, Yumbe, West Nile, Northern Uganda

UN news You’ve worked with companies that sell solar services in the north. Why?

Dmitry Pozhidaevi Electricity access is still a challenge in Uganda, and access to grid electricity is not available in many places, especially in rural areas.

However, even in Kampala and in the larger cities, there are frequent power outages and interruptions in the electricity supply, which has multiple consequences for businesses, individuals and government agencies.

Ensuring access to solar energy provides additional opportunities for businesses, especially micro and small businesses, and especially in rural areas. With access to electricity, those companies can extend their working hours because they can now work outside of daylight hours.

For individuals, it means enlightenment, and it allows students to use electronic devices and study longer.

We work with a company that supplies solar panels based on a pay-as-you-go system. Their customers’ payments are tracked digitally, which means they can build up a credit score, making it easier for them to get loans from the formal banking system.

This is very important in an economy where 90 percent of employment is in the informal sector: in the absence of formal data, it is very, very difficult for anyone to access the formal financial system.

Cathy Avako, a farmer's wife in the village of Lumonga, West Nile, Northern Uganda.

UN news/ Conor Lennon

Cathy Avako, a farmer’s wife in the village of Lumonga, West Nile, Northern Uganda.

UN news Some of your projects include financing for MTM and Airtel, the largest telecom companies in Africa. Why should they get UN funding?

Dmitry Pozhidaevi People often find that surprising. They think a large company can afford to expand into less traditional and more risky areas.

This is not the case, even for very large and financially sound companies such as MTM and Airtel; unless the viability of the business case is demonstrated to them, they will clearly not move into areas where they are not currently involved.

And this was the case with the refugee camps. The telecom companies have serious doubts about the ability of refugees to buy the products they offer.

But by demonstrating the refugees’ demand and ability to pay, and by facilitating some relatively small grants, we’ve enabled these companies to expand into refugee camps in northern Uganda.



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